THE STUDY ON SOLID WASTE MANAGEMENT PLAN FOR … · JICA selected and dispatched a study team headed by Mr. Hiroshi Kato, KOKUSAI KOGYO CO., LTD. to Panama three times between December

MUNICIPIO DE PANAMA

JAPAN INTERNATIONAL COOPERATION AGENCY

MUNICIPALITY OF PANAMATHE REPUBLIC OF PANAMA

THE STUDY ONSOLID WASTE MANAGEMENT PLANFORMUNICIPALITY OF PANAMAIN THE REPUBLIC OF PANAMA

Final ReportVolume I

SUMMARY

MARCH 2003

KOKUSAI KOGYO CO., LTD. SSS

JR

03-22

NO.

PREFACE

In response to a request from the Government of the Republic of Panama, the Government of Japan

decided to conduct a development study on Solid Waste Management Plan for Municipality of

Panama in the Republic of Panama and entrusted the study to the Japan International Cooperation

Agency (JICA).

JICA selected and dispatched a study team headed by Mr. Hiroshi Kato, KOKUSAI KOGYO CO.,

LTD. to Panama three times between December 2001 and January 2003.

In addition, JICA set up an advisory committee headed by Dr. Hidetoshi Kitawaki, a professor of

Toyo University, which examined the study from specialist and technical points of view.

The team held discussions with the officials concerned of the Government of Panama and

conducted field surveys at the study area. Upon returning to Japan, the team conducted further

studies and prepared this final report.

I hope that this report will contribute to the promotion of this project and to the enhancement of

friendly relationship between our two countries.

Finally, I wish to express my sincere appreciation to the officials concerned of the Government of

the Republic of Panama for their close cooperation extended to the Team.

March, 2003

Takao KAWAKAMI President

Japan International Cooperation Agency

March 2003 Mr. Takao KAWAKAMI President Japan International Cooperation Agency

Letter of Transmittal

Dear Mr. KAWAKAMI,

We are pleased to submit the report of the Study on Solid Waste Management Plan for Municipality of Panama in the Republic of Panama.

This report consists of three components: a study on the present practices of waste management in Municipality of Panama; the formulation of the solid waste management master plan until the year 2015; and a feasibility study on the priority projects drawn from the master plan.

In the study on the present practices, six types of field investigations were conducted and existing data and information of various sources were collected and examined. By doing so, the current status of solid waste management in Municipality of Panama was thoroughly understood and the issues to be considered were identified.

The master plan was formulated aiming at overcoming these issues, with ultimate goals of the establishment of a sound municipal solid waste management system by 2015. In concrete terms, to eliminate waste from living environment for protecting the health of the citizens, to establish an appropriate final disposal system for mitigating environmental impacts caused by collected waste, and to contribute resource conservation through waste minimization have been developed as policies of the master plan. On the basis of the policies, technical, legal, organization and financial systems have been formulated. It was one of distinguishing characteristics of the study that six pilot projects were selected out of various improvement measures of the master plan with taking into account their urgency and implemented.

The feasibility study was carried out on two priority projects which are the construction of a new landfill that can receive waste until 2015 in the existing final disposal site, or Final Disposal Project, and a transfer and transport system that copes with the rapid urbanization in the east of Municipality of Panama, Transfer and Transport Project.

The Municipality of Panama has already implemented various measures for the goal of the master plan, such as enactment of a municipal ordinance on solid waste management that was jointly formulated by the Panamanian side and the Study Team, and invitation for bids on the Final Disposal Project for utilizing finance in the private sector. The study is actually yielding results.

We would like to take this opportunity to express our sincere gratitude to your Agency, the Ministry of Foreign Affairs, the Ministry of Economy, Trade and Industry, and the Ministry of Environment of Japan. We would also like to extend our deep appreciation to the Government of Panama, the Embassy of Japan and the JICA office in Panama for their vital cooperation during the implementation of our study in Panama.

Last but not least, we hope that the output of our study presented here will contribute to the improvement of solid waste management and citizens’ welfare in the Municipality of Panama.

Respectfully,

Hiroshi KATO Team Leader The Study on Solid Waste Management Plan for Municipality of Panama in the Republic of Panama

The Study on Solid Waste Management Plan for JICA Municipality of Panama in the Republic of Panama KOKUSAI KOGYO CO., LTD.

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1 Objectives of the Study The Study has the following three objectives:

• Formulation of a Master Plan on solid waste management in the municipality of Panama targeting the year 2015

• Implementation of Feasibility Study for selected priority project(s) • Technology transfer to the counterpart personnel in the course of the Study

2 Study Area The study covers the area under the jurisdiction of the municipality of Panama, but not covers

the municipality of San Miguelito and other municipal areas that avail themselves of Cerro

Patacon Final Disposal Site. However, it was carried out to collect data and to estimate waste

amount of those municipalities, in order to attain the objectives mentioned above.

3 Solid Waste to be Covered Under the Study This study covers municipal solid waste, industrial waste and medical waste. However, the

study on industrial and medical waste were carried out NO further than grasp of present

condition and suggestion to find and handle problems in the master plan.

Municipal solid waste consists of:

• Household waste • Commercial waste • Institutional waste • Market waste • Road sweeping waste

4 Target Years Target years set in the Study are as follows.

i) Master Plan 2015

ii) Selected Priority Projects

The Final Disposal Project • Phase I 2006 to 2008(operation) • Phase II 2008 to 2010(ditto) • Phase III 2010 to 2011 (ditto) • Phase IV 2012 to 2015 (ditto)

The Transfer and Transport Project

• Phase I 2005 to 2007 • Phase II from 2008


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5 The Master Plan 5.1 Outline of the Master Plan

5.1.1 Goals

The principal goal of the Master Plan is to establish a sound Solid Waste Management System by the target year 2015 in Municipality of Panama, where the population and major economic activities of the country are centered.

The Master Plan aims to:

• promote the citizens’ well-being;

• implement sustainable SWM; and

• contribute to environmental conservation.

5.1.2 Outline of the Master Plan Table 1 shows contents of the master plan.

Table 1: Outline of the Master Plan Item Present (2002) Phase 1(2005) Phase 2 (2010) Phase 3 (2015)

General information Population (Panama ) 744,448 807,868 944,574 1,132,726 Service coverage (%) 92 98 100 (2006) 100Waste generation amount (ton/day) Total (ton/day) 1,025 1,102 1,263 1,444 Household waste 439 476 557 669

Commercial, institutions and industries 421 459 534 596

Market waste 24 24 24 24 Bulky waste 12 14 19 26 Street sweeping waste 8 8 8 8 Hospital waste 20 20 20 20 Demolition waste 96 96 96 96 Sewage 5 5 5 5 Potential recyclable waste 293 328 385 444 Non-recyclable waste 732 774 909 1,047Discharge and storage Separate 0 % 0 % 16.5% 50%

Discharge manner Mixed 0 % 0 % 83.5% 50%

Total 965 1,065 1,231 1,408 Separate 0 0 63 222

Discharge amount (ton/day) Mixed 965 1,065 1,168 1,186

Recycling amount (ton/day) 0 0 27 94Collection and transport Collection system Collection vehicle Collection vehicle Collection vehicle Collection vehicle

Transport system Collection vehicle Collection vehicle and transfer station

Collection vehicle and transfer station

Collection vehicle and transfer station

Facilities

Transfer station - Installation and operation Operation Operation

Material Recovery Facility - - Installation, operation, expansion Final disposal Final disposal site Cerro Patacon Cerro Patacon Cerro Patacon Cerro Patacon

Landfill Sanitary landfill and control dumping Sanitary landfill

Panama 965.0 1,065.3 1,204.0 1,314.1San Miguelito 216.7 250.0 320.3 393.5Arraijan 27.4 39.0 70.5 122.8

Disposals amount (ton/day)

Total 1,209.1 1,354.3 1,594.8 1,830.4


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5.2 Project Cost Estimation

Overall costs of the M/P are shown below.

Table 2 : Overall Cost (New Facilities) unit : U$1,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total

Overall costs

Investment

Separate Collection 0 0 0 0 0 89 179 268 178 355 355 356 533 534 2,847

Transfer station 0 67 3,106 0 0 1,876 0 0 0 0 0 0 0 0 5,049

Tractor (300-350hp) 0 0 0 356 89 89 89 0 0 89 356 178 89 178 1,513

Trailer (85 yd3, 20 ton) 0 0 0 326 54 54 163 0 0 54 326 109 54 217 1,357

MRF (Cerro Patacon) 0 0 0 20 800 32 1,292 47 1,937 47 1,937 21 873 0 7,006

Landfill (Cerro Patacon) 0 0 141 9,541 306 20,706 341 23,041 8 508 0 0 0 0 54,592

Total 0 67 3,247 10,243 1,249 22,846 2,064 23,356 2,123 1,053 2,974 664 1,549 929 72,364

Operation and maintenance

Separate Collection 0 0 0 0 0 206 418 625 418 831 831 831 1,242 1,249 6,651

Transfer station 0 0 0 211 211 211 270 270 270 270 270 270 270 270 2,793

Tractor (300-350hp) 0 0 0 122 152 183 213 213 213 244 244 274 274 305 2,437

Trailer (85 yd3, 20 ton) 0 0 0 7 8 9 12 12 12 13 13 14 14 16 130

MRF (Cerro Patacon) 0 0 0 0 0 40 40 105 105 202 204 301 301 345 1,643

Landfill (Cerro Patacon) 0 0 0 2,946 2,946 2,946 2,946 2,946 2,946 2,946 3,604 3,604 3,604 3,604 35,038

Total 0 0 0 3,286 3,317 3,595 3,899 4,171 3,964 4,506 5,166 5,294 5,705 5,789 48,692

Investment and O&M total

Total 0 67 3,247 13,529 4,566 26,441 5,963 27,527 6,087 5,559 8,140 5,958 7,254 6,718 121,056

Table 3 : Total Overall Cost

Unit : U$1,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 TotalInvestment New item 0 67 3,247 10,243 1,249 22,846 2,064 23,356 2,123 1,053 2,974 664 1,549 929 72,364Current landfill 0 10,500 2,800 1,800 0 0 0 0 0 0 0 0 0 0 15,100Investment total 0 10,567 6,047 12,043 1,249 22,846 2,064 23,356 2,123 1,053 2,974 664 1,549 929 87,464O&M New item 0 0 0 3,286 3,317 3,595 3,899 4,171 3,964 4,506 5,166 5,294 5,705 5,789 48,692Current landfill leachate treatment 0 2,742 2,848 3,146 1,711 180 180 180 180 180 180 180 180 180 12,067O&M total 0 2,742 2,848 6,432 5,028 3,775 4,079 4,351 4,144 4,686 5,346 5,474 5,885 5,969 60,759Total 0 13,309 8,895 18,475 6,277 26,621 6,143 27,707 6,267 5,739 8,320 6,138 7,434 6,898 148,223


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5.3 Financial Evaluation

5.3.1 Financial Internal Rate of Return (FIRR)

Implementation of the Master Plan between 2003 and 2015 would give a positive financial

balance of $61.5 million for the period, resulting in a financial internal rate of return (FIRR)

of 47.5%. The high FIRR should be viewed with caution because it is extremely sensitive to

variations in income. If government subsidy is eliminated as income source, the FIRR would

go down to 17.8%. And if government subsidy plus income from landfill are eliminated,

FIRR would go down to 7.4%.

Posing still greater problems, large cash flow deficits are expected in some years: around $3.9

million in 2003, $3.1 million in 2005, $10.6 million in 2007 and $10.9 million in 2009.

5.3.2 Sensitivity Analysis

Sensitivity analysis was conducted by assuming a 10% reduction in total income, a 10%

increase in total cost, and a simultaneous 5% reduction in total income and 5% increase in

total cost. Results are summarized in the following table.

Table 5-4: Sensitivity Analysis

Cases FIRR Base Case 47.5% Income reduction: -10% 3.4% Cost Increase: +10% 5.8% Income reduction: -5% and Cost Increase: +5% 4.6%

5.4 Economic Evaluation

In this economic evaluation, three cases where the above cost reductions are considered or

not considered are analyzed as presented in the following.

Table 5 : Study Case in Economic Evaluation

Cost Benefit Case 1 Existing cost + incremental cost Case 2 (Existing cost + incremental cost) – (saving cost by T/S system)

Case 3 (Existing cost + incremental cost) – (save cost by T/S system + cost reduction of collection system)

Willingness to pay (U$ 77.02/ton)

Table 6 : EIRR and B/C

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EIRR B/C

Case 1 -5,052 -683 -9,822 465 -17,234 2,282 -18,235 2,197 2,682 190 2,250 965 1,455 -26.32% 0.919

Case 2 -5,052 -683 -9,637 667 -17,017 2,513 -17,988 2,460 2,962 489 2,568 1,303 1,815 -23.18% 0.925

Case 3 -2,679 1,771 -7,097 3,309 -14,306 5,279 -15,163 5,331 5,884 3,460 5,592 4,380 4,948 0.47% 1.002


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As the results show, the benefit-cost rate slightly exceeds 1.0 and EIRR barely becomes

positive in the Case 3 where the Transfer and Transport System is introduced and the

collection improvement is carried out as proposed in the M/P.

Consequently, it is evaluated that the M/P is economically feasible and upgrades the urban

environment as well as improve the efficiency of MSWM carried out by DIMAUD.

6 Feasibility Study and Pre-feasibility Study for Priority Projects

6.1 Target

It is indispensable to secure a final disposal site for a sound Solid Waste Management. There

is a plan to expand the existing landfill, or Etapa 2 in the Cerro Patacon Landfill. The part to

be expanded is called Phase 4 of Etapa 2 and will have a capacity of 1,800,000 m3. The Phase

4 will be full by the beginning of 2006. Then, another new landfill will be necessary.

Therefore, a feasibility study is conducted under the scheme of the Study for a new landfill,

or Cerro Patacon Etapa 3, to be operated between 2006 and 2015.

Waste collection works require a large amount of costs. At present, about 46% of the total

SWM costs are spent for the collection works. Therefore, it is expected that improvement of

collection efficiency will bring a considerably large cost reduction and will help the SWM

stable. The collection works can be divided into two components, i.e., collection that picks up

waste from generation sources in an area and transport that carries waste collected to a final

disposal site.

In the Study, a pilot project to improve the collection efficiency was carried out. It brought a

result of 21% reduction of the direct cost in the pilot project area. Meanwhile, it has also been

sought to improve efficiency of transport in the eastern area (Tocumen, Pacora and San

Martin) and northern area (Chilibre) where the distances to the Cerro Patacon Landfill exceed

40 km (a round trip). Therefore, aiming at improve the efficiency of the transport, a

pre-feasibility study of transfer and transport systems in the areas were carried out.


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6.2 Outline of Projects

Table 7 shows the outline of the final disposal project. Table 8 presents the transfer transport

project.

Table 7: Outline of the Final Disposal Project (Feasibility Study)

Facilities Items Overall Phase 1 Phase 2 Phase 3 Phase 4

Construction site Cerro Patacon Area Construction period - 2005 to early

20062007 to early

20082009 to early

2010 2011

Operation period 2006 to 2015 early 2006 to early 2008

early 2008 to early 2010

early 2010 to end of 2011 2012 to 2015

Site area :28 ha Area

Filling area : 20.4 ha 6.9 ha 6.5 ha 6.3 ha 20.4 ha

Landfill waste Municipal waste Landfill capacity 6,400,000 m3 1,300,000m3 1,200,000m3 1,100,000m3 2,800,000m3

Access Existing road and internal roadLength of internal road : 2,570 m

Length of internal road : 1,300 m

Length of internal road : 800m

Length of internal road : 470m

-

Waste transport control facilities Gate : 2 (existing), Weighbridge : 2 (existing), Car washing : 1 (existing), Site office :1, Work shop :1

Seepage control works: installation of 1.5 mm HDPE synthetic liner with 10 mm geotextile (under and upper of synthetic liner), installation of soil layer for protection of synthetic liner Collection and treatment system Collection pipe: 6,690m(dia. 200 to 900mm) 2,070 m 2,020m 1,830m 770m

Leachate management Treatment system

Regulation pond : 24,000 m3,Treatment capacity : 800 m3/day (oxidation ditch with chemical sedimentation, sand filtration and activated carbon absorption)

Intake water quality : BOD 10,000 mg/l, COD 18,000 mg/l, Org-N 200 mg/l, NH3-N 200 mg/l, P 30mg/l Treated water quality ; BOD 35 mg/l, COD 100 mg/l, Org-N 10 mg/l, NH3-N 3 mg/l, P 5mg/l (comply the ANAM discharge limit )

Landfill gas management

Gas ventilation pipe (PVC 200 mm) : 92 nos. 23 nos. 22 nos. 21 nos. 26 nos.

Rain water management

Trapezoidal lined ditch (wide 800 to 1,700 mm): 2,300 m and daily cover soil

1,190 m 700 m 410 m -

Landfill operation Cell method with compaction, daily soil cover thickness15cm, final soil cover thickness 60cm Aesthetic design Daily soil cover Closure and post-closure Final soil cover 60 cm Greening by seeding the final cover with grass


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Table 8: Outline of the Transfer and Transport Project (Pre-feasibility Study)

Facilities Items Overall Phase 1 Phase 2

Construction site Possibly along the American Highway in Pacora Corregimiento (the site will be looked for later by DIMAUD)

Construction period - 2004 2007

Operation period From 2005 (economic life of the transfer station is assumed as 20 years)

From 2005 From 2008

Site area 5 ha - - Target Waste Municipal waste generated from Tocumen, Pacora and San Martin corregimientos Facilities Direct dump station

Platform 2,500 m2 1,250 m2 1,250 m2 Hopper 4 units 2 units 2 units

Weighbridge 2 units 1 unit 1 unit Others Office, workshop, fence, gate, car washer, buffer zone

Transport Equipment Tractor-trailer (20 ton); 17 units of tractor and 25 units of trailer are to be purchased in total between 2005 and 2015.

Collection Vehicle 16 yd3 (12.2m3) compactor truck; 67 units are to be purchased in total between 2005 and 2015.

6.3 Cost Estimation

6.3.1 New Landfill

Overall cost for new landfill shows below table.

Table 9 : Overall Cost unit : U$ 1,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total Landfill site Investment Design & supervision 66 66 306 306 341 341 8 8 1,442

Construction 4,400 20,400 22,700 500 48,000O&M 2,811 2,811 2,811 2,811 2,811 2,811 2,811 3,469 3,469 3,469 3,469 33,553Total 66 7,277 3,117 23,517 3,152 25,852 2,819 3,319 3,469 3,469 3,469 3,469 82,995Leachate treatment Investment Design & supervision 75 75 150

Construction 5,000 5,000O&M 135 135 135 135 135 135 135 135 135 135 135 1,485Total 75 5,210 135 135 135 135 135 135 135 135 135 135 6,635Overall cost Investment total 141 9,541 306 20,706 341 23,041 8 508 0 0 0 0 54,592

O & M total 0 2,946 2,946 2,946 2,946 2,946 2,946 2,946 3,604 3,604 3,604 3,604 35,038Total 141 12,487 3,252 23,652 3,287 25,987 2,954 3,454 3,604 3,604 3,604 3,604 89,630


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6.3.2 Transfer and Transport Project

Table 10 shows overall costs required for the transport ant transport system.

Table 10 : Overall Cost of the Transfer and Transport System in the East

Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total Transfer station Design and supervision 67 67 0 0 55 0 0 0 0 0 0 0 0 189Capital 0 3,039 0 0 1,821 0 0 0 0 0 0 0 0 4,860O&M 0 0 211 211 211 270 270 270 270 270 270 270 270 2,793Total 67 3,106 211 211 2,087 270 270 270 270 270 270 270 270 7,842

Transport Capital 682 143 143 252 0 0 143 682 287 143 395 2,870O&M 129 160 192 225 225 225 257 257 288 288 321 2,567Total 811 303 335 477 225 225 400 939 575 431 716 5,437

Collection Capital 978 623 178 89 89 1,156 800 267 267 178 1,334 5,959O&M 604 989 1,099 1,153 1,208 1,319 1,428 1,484 1,593 1,648 1,759 14,284Total 1,582 1,612 1,277 1,242 1,297 2,475 2,228 1,751 1,860 1,826 3,093 20,243

Total Cost 67 3,106 2,604 2,126 3,699 1,989 1,792 2,970 2,898 2,960 2,705 2,527 4,079 33,522

6.4 Financial Evaluation

From a viewpoint of DIMAUD, it was evaluated in the M/P that such concession contract

would be financially feasible. The financial analysis conducted in the F/S also concluded that

the concession contract would be financially feasible for contractor(s) as shown in Table 11.

Table 11 : Results of Financial Analysis

Case FIRR (%) Landfill 5.2 Transfer transport system 3.5 Landfill and Transfer transport system 4.9

The FIRRs in the table do not exceed annual interests set by commercial banks in Panama,

that is about 9.5%. However, those FIRRs are over 1.8% of annual interest used in the Study,

which takes into consideration risks on interest rates set by international financial institutions,

such as LIBOR.

Consequently, it is evaluated that the implementation of the priority projects will be

financially feasible under concession contract. International tender should be held, in which

private companies that are capable to procure the international fund can participate.


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6.5 Economic Evaluation

Willingness to Pay (WTP) of the citizens to MSWM obtained from POS is considered as

benefit, as well as for the economic evaluation of the M/P.

6.5.1 Final Disposal Project

Table 12presents 1.215 of Benefit-Cost Ratio (B/C) and 8.9% of Economic Internal Rate of

Return (EIRR) resulted from calculation with the benefit and costs required for the project.

Consequently, it is evaluated that the project will be economically feasible.

Table 12: Cost and Benefit (Final Disposal Project) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total

Investment (Exc. TAX 5%) 134 9,087 291 19,720 325 21,944 8 484 0 0 0 0 51,993

O & M 0 2,946 2,946 2,946 2,946 2,946 2,946 2,946 3,604 3,604 3,604 3,604 35,038Cos

t

Total 134 12,033 3,237 22,666 3,271 24,890 2,954 3,430 3,604 3,604 3,604 3,604 87,031Disposal amount (ton/year)

0 0 262,276 535,966 551,004 567,393 582,102 597,943 613,930 631,414 649,189 668,096

Ben

efit

Willingness to pay (U$1,000) 0 0 4,899 10,012 10,293 10,599 10,874 11,170 11,468 11,795 12,127 12,480 105,717

Balance -134 -12,033 1,662 -12,654 7,022 -14,291 7,920 7,740 7,864 8,191 8,523 8,876 EIRR 8.9% B/C 1.215

6.5.2 Transfer and Transport Project

Table 13presents 1.251 of Benefit-Cost Ratio (B/C) and 17.5% of Economic Internal Rate of

Return (EIRR) resulted from calculation with the benefit and costs required for the project.

Consequently, it is evaluated that the project will be economically feasible.

Table 13 : Cost and Benefit (Transfer and Transport Project)

Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 TotalWaste amount (1000ton) 57 78 105 111 117 126 135 144 153 162 171 1,359Cost (U$1000) Invest (ex. 5% tax) 64 2951 1577 728 2087 324 85 1098 896 902 526 305 1643 13,186 O&M 0 0 944 1,360 1,502 1,648 1,703 1,814 1,955 2,011 2,151 2,206 2,350 19,644 Total 64 2,951 2,521 2,088 3,589 1,972 1,788 2,912 2,851 2,913 2,677 2,511 3,993 32,830

Benefit (U$1000) WTP 1,723 2,358 3,174 3,356 3,537 3,809 4,081 4,353 4,625 4,897 5,169 41,083

Balance -64 -2,951 -798 270 -415 1,384 1,749 897 1,230 1,440 1,948 2,386 1,176 8,253 EIRR 17.5% B/C 1.251


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6.6 Conclusions and Recommendations

6.6.1 Conclusions

1. Present Situation

Panama District, which has a population of about 744,000 as of 2002, is kept clean. The

results of Public Opinion Survey (POS) curried out in the Study clarified that about 70% of

the citizens (very satisfied 31%, satisfied 39%) are satisfied with the present Solid Waste

Management. This is considered due to efforts of DIMAUD (Municipal Bureau for Urban

and Household Cleansing) and organizations/persons concerned, and is highly appreciated.

However, large costs are required for waste collection and street sweeping in order to

maintain the city cleanly. It is difficult to say that such works are efficient. If the inefficient

works lower collection service quality in the future, the citizens’ satisfaction would also

lower; the citizens who answered “satisfied,” would change “not satisfied.”

About 1,200 ton of waste is disposed of at Cerro Patacon Landfill everyday. 80% of it is from

Panama District. Medical and industrial wastes are included in the waste brought in. The

waste is compacted by heavy equipment, but daily cover soil is not practiced strictly.

Furthermore, there are many waste-pickers working inside the landfill, then, it reduces the

landfill operation efficiency.

Meanwhile, large quantity of waste from business establishments is assumed as household

waste and applied the tariff for household, i.e., waste collection fee per unit of those wastes

are same or lower than of household. This is against the Polluter-Pay-Principle (PPP), as well

as it reduces DIMAUD’s revenue and makes its management unstable.

2. Master Plan

The principal goal of the Master Plan is to establish a sound Solid Waste Management

System by the target year 2015 in Panama District, which practically aims to promote the

citizens’ well-being, to implement sustainable SWM and to contribute to environmental

conservation.

Maintenance and improvement of the city’s cleanliness and establishment of cost-effective

SWM will lead to promotion of the citizens’ well-being. Sustainable SWM will be

established through Institutional Capacity Building (ICB). And, encouragement of waste

reduction, reuse and recycling with environmental education will contribute to environmental

conservation.


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These issues are not achieved by only DIMAUD’s effots. Those can be realized under where

the citizens and the SWM executing bodies cooperate each other. The Municipal Ordinance

proposed in the Study defines responsibilities and roles of actors, such as dischargers,

DIMAUD and the private sector. It is expected that the actors will cooperate each other under

the legal framework set by the Municipal Ordinance in order to realize the Sound SWM. For

encouraging cooperation from the citizens, it is crucial to carry out educational campaign

such as environmental education. Educational methods/skills and materials transferred to the

Panamanian side through implementation of the Environmental Education Pilot Project will

secure expansion of environmental education and its effectiveness after the Study.

As for the waste collection work, it is important to improve its efficiency without reduction of

the service quality. The Collection Improvement Pilot Project transferred skills and

knowledge how to do so. It is expected that DIAMUD will expand the pilot project to other

areas based on the experience.

As for the final disposal, DIMAUD can improve the landfill operation by adapting cell

methods transferred to them through the Landfill Operation Improvement Pilot Project.

At present, hazardous waste is mixed with non-hazardous municipal waste. Facilities to deal

with hazardous waste are required to dispose of such mixed waste properly. In this case, costs

per ton of waste for construction and O&M of such facilities will surely be much higher than

facilities for non-hazardous waste. Then, such costly facilities are not recommendable. In

principle, generators should appropriately dispose of their hazardous waste by themselves.

However, taking into account the present situation, it is recommendable to properly separate

the hazardous waste and to set up a facility for only hazardous waste in the Cerro Patacon

Final Disposal Site apart from the proposed landfill for non-hazardous waste.

The issue of waste-pickers is typical in developing and intermediately developed countries.

This is usually solved by economic growth that creates job opportunities and by efforts of

organizations and persons concerned, but it takes for a long period. Measures that should be

taken against this issue in Panama are to control waste-pickers activities hampering the

landfill operation and to establish rules of waste picking with taking into account their safety.

As for leachate from the landfill, the existing treatment system cannot meet with the standard

set by ANAM, then, the M/P recommends a methods that suites to it.

In views of PPP and DIMAUD’s management state, origins and amounts of wastes from

business establishments should be clarified and appropriate tariff should be applied for the

wastes. In this case, the business establishments need to pay more than before. In order to


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induce them to do so, a special collection service that meets with their needs shall be

provided.

3. Feasibility Study

Out of the projects and improvement measures proposed in the M/P, the Final Disposal

Project and the Transfer and Transport Project are selected as the priority projects for the

Feasibility Study and the Pre-feasibility Study from viewpoints of importance and urgency.

It was evaluated that those priority projects would not cause serious technical and social

problems. However, it was found that large deficits would happen in the DIMAUD’s cash

flow, if the priority projects are implemented directly by DIMAUD. Then, the Study

recommends to make good use of the private sector in a scheme of concession contract. Open

market rates in Panama are considerably high, about 9.5% annually. However, some

international banking institutions provide lower interest rates. For example, JBIC, or Japan

Bank for International Cooperation, has a financing scheme named as Overseas Investment

Loans, which lends money at lower interest rates, e.g., LIBOR plus 0.4 to 0.5%, to Japanese

companies or joint ventures of Japanese and local companies. Consequently, it is

recommendable to hold an international tender, in which foreign and/or joint companies

including from Japan can participate, in order to make DIAMUD’s cash flow stable for

provision of sound SWM.

4. Cost-Benefit Ratio

1.002 of Cost-Benefit Ratio was obtained by dividing WTP of the citizens for SWM by the

total costs for implementation of the all project proposed in the M/P (inc. cost reduction), as

shown in the table below.

Total Cost (Cost, U$1,000) Willingness to Pay (Benefit, U$1,000) Benefit / Cost438,206 438,905 1.002

Consequently, it can be said that the society of Panama will be able to bear the costs incurred

by implementation of the M/P during 2003 and 2015 as well as achievement of the M/Ps

goal.


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6.6.2 Recommendations

1. DIMAUD´s Vision and Mission

The population of the District deserves a Great City; that is the vision of the Mayor´s office

and the Municipality. DIMAUD´s vision forms part of standards of life that is being pursued

and has the purpose to recover the nickname of “golden cup” for Panama City which used to

distinguish this city due to the ornate and cleansing of its roads and public areas.

Within this vision, DIMAUD has a mission that is to implement a sustainable solid waste

management to promote the well-being of citizens through the protection of their health and

the preservation of the environment.

The Master Plan submitted to the authorities proposes various improvement measures. Of

course, DIMAUD will be able to fulfill its mission through implementation of the M/P.

The execution and successful finalization of the M/P depends on the degree of willingness of

the Panamanian side, especially DIMAUD.

2. SWM: a public service

A public service should be effective and also efficient. Effectiveness is linked to the

attainment of objectives and efficiency is linked to the results.

The main objectives of DIMAUD are linked to two factors, i.e., health and the environment.

Both of them are social goods which can be immediately deteriorated if SWM is ineffective.

The costs of health service is extremely high for the society; and environmental deterioration

is, in cases, irreversible. DIMAUD and competent institutions should join efforts under the

principle that it is preferable to invest in public services than to pay the costs for negative

externalities derived from deficient SWM.

Effectiveness of the service should be measured based on how diseases linked to deficient

solid waste management are being controlled, the preservation of the environment, and better

use of the natural resources.

A healthy city has a clean city image. We are going on the right path.

3. Service sustainability: a need

If we are already effective; now, we should be efficient. The M/P could be a guide if the

proposed decisions are taken. As a public service which should be provided along the time

with quality and efficient costs, it is necessary to structure SWM service with a long term

vision. The M/P has a target year set as 2015.


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4. Institution

The city is a kind of organizations in which the citizens conduct their activities. Every

organization needs “rules of game”, i.e., institutions.

The current legislative period of the Honorable Municipal Council is considering a project of

legislation which has, as main purpose, the regulation of the relations between the

Municipality, its clients and the private sector. It is necessary that the service has a normative

which regulates its operation. It will be the first step to establish responsibilities, duties, and

rights of the main actors. Subsequently, the normative could be perfected through the

experience attained.

If all actors fulfill their responsibilities, the health and the environment will be protected. At

this point, the effective coordination among the competent authorities is of vital importance.

5. Organization

The M/P incorporates a proposal to adjust the organizational structure of DIMAUD. The

adjustments are directed to obtain as much synergy as possible among the different

administrative units. If we keep in mind that DIMAUD has a social mission to satisfy and

objectives to attain, it is necessary that all activities are directed to satisfy that mission and to

attain those objectives. As a result, teamwork will be strengthened a matter of course.

The top management has decided to initiate these adjustments which should be permanently

evaluated in the face of the operational changes that are also being proposed. Readjustments

should be implemented as they are needed.

The experience obtained through the adjustment of the organizational structure will be highly

valuable to evaluate the possibility to create a new municipal enterprise for Solid Waste

Management for the District. The proposed structure in the M/P corresponds to a kind of

enterprise structures. An organization of this type would strengthen the sustainability of the

service because it would incorporate long-term planning. Additionally, technical,

organizational, and financial capacities can be integrated. A successful example which can be

analyzed is the case of the Urban Planning and Research Institute of Curitiba Municipality.

This is a municipal enterprise which is world-famous. This way, independence from politics

can be attained.

6. Planning

The M/P incorporates planning as a routine task during the development of DIMAUD´s

activities. It is necessary to know the direction, the means, and the cost.


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Establishment of the Executive Unit would be highly beneficial to plan the attainment of the

objectives defined for the entity and the strategies of the top management. The M/P provides

a detailed listing of activities to be undertaken by the Executive Unit.

It should be emphasized the need to assign a personnel having enough knowledge and

experiences in the SWM sector on a full time basis to integrate various activities assigned to

the Executive Unit. The results of the service provision will be linked to the performance of

this team.

DIMAUD´s Executive Unit will only be the second unit formed under JICA´s SWM Studies.

It is highly recommendable to create a network of executive units on solid waste management

which would interact between them. The first unit successfully working is the Planning

Office for the Metropolitan Area of San Salvador (OPAMSS).

Monitoring and control of management is a tool for the sustainability of the service. The top

management has decided to organize an administrative unit for the control of management as

proposed in the M/P. The JICA Study has equipped this unit and the personnel have received

training material. The following step would be establish an accounting system which is able

to clarify costs of respective activities. With the previous activity, management indicators

such as collection cost per ton of waste will be prepared which would be sent to the appointed

officers.

Every customer service activity should be personalized. The characteristic of the SWM

service requires an active participation of the client in particular and of the public in general.

Success in providing the service largely depends on an effective coordination and support

between the different actors: DIMAUD and its clients. The M/P introduces a policy of

customer service which should be implemented and intensified.

Consequently, the top management has decided to organize an administrative unit for

Customer Attention which is formed by S.O.C.I.O., Public Relations and Quality Control

sections. The activities to be developed are diverse, but complementary. Teamwork is

fundamental i.e., an effective coordination will be of vital importance.

On DIMAUD´s part, the communication system in solid waste management has been

organized by creating an administrative unit for customer service. Additionally, the

800ASEO service has been expanded and improved. Now, S.O.C.I.O should be strengthened

to complement the communication system.

S.O.C.I.O should promote the constitution of the Committees for Cleansing and Ornate. The

Honorable Representatives of the Corregimiento in the District should be informed about the


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results which are being obtained in Juan Diaz and Rio Abajo corregimientos in order to

include these experiences in their respective corregimientos.

7. Minimization

The Panama District should conduct every effort to encourage waste minimization which is

one of the main policies of the M/P.

In this effort, all actors should participate: the customer, the commerce, the industries, the

NGO´s, the public entities. All of them should receive DIMAUD´s message: to minimize

waste generation.

In order to attain this objective of the policy, DIMAUD should continue the education

campaign that initiated in some schools in the Environmental Education Pilot Project.

Excellent educational materials are available which should be used rationally and should be

reproduced whenever it is necessary. The materials should be delivered to all schools in the

District. The goal is to promote public participation in waste minimization activities.

Several schools have joined the recycling program “Cumple tu papel”. The program should

reinitiate at the beginning of the next school year (2003). DIMAUD should support,

strengthen, and expand this program as a manner to promote minimization and education to

preserve the environment and conservation of the natural resources.

The private sector should assume its responsibility on generating large amount of waste. This

practice is transforming a private cost into a social cost. “Polluters Pay Principle are not well

practiced in the Panamanian environmental arrangement. The participation of the private

sector is of vital importance to stop the continuous waste generation increment.

The multi-national companies which operate in Panama could transfer their experience,

procedures, and practices to minimize solid wastes which are implemented in their respective

countries and can become true allies in this crusade. It is necessary to convoke them and

motivate their interest.

8. Operations

The operation of the services is the most important activity conducted by DIMAUD. The

effectiveness in their performance is a parameter which serves to qualify DIMAUD.

However, it is necessary to attain efficiency in the service in order to make SWM sustainable.

The M/P proposes to adjust the organizational structure of DIMAUD in order to improve the

efficiency through the integration of all the operations into a single administrative unit: the

Operations Department. DIMAUD´s top management has considered convenient this

proposal and it has been approved.


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It is expected for the Operations Department to achieve a better quality in service and a

significant reduction in costs, i.e., to do more with less costs.

9. Collection and Maintenance

During the year 2001, the collection service represented 53% of total expenditures. The

Collection Improvement Pilot Project showed that efficiency levels, which are competitive in

the Latin-American market, can be attained. The direct costs of labor and associated to

vehicle were reduced in about 21% which represents approximately 10% of total collection

costs.

Currently, the improvement of two routes has initiated by making use of the Manual of

Procedures to Optimize the Routes in the pilot project. If this improvement practice is

expanded to the other routes, around of U$.1.4 millions/year could be saved.

Now, DIMAUD has a digitalized map which could be used for planning and optimization of

collection routes.

The top management of DIMAUD has decided to organize a Collection Special Service for

ICI’s (for institutional, commercial, and industrial clients). The wastes collected by

DIMAUD from ICI’s clients represent about 50% of the total amount of solid wastes.

The participation of ICI’s clients in the total income of DIMAUD could increase if the

service meets with needs of ICI’s.

The M/P includes a strategic procedure to implement this special collection service and

DIMAUD could and should initiate procedures to organize it and provide it.

The maintenance activities are linked to the collection activities. The procedures that are used

for maintenance should follow necessarily the instructions provided by the manufacturer. The

formalities for the procurement of spare parts should be simplified to a minimum.

10. Street Sweeping

With taking into account the present situation, mechanical street sweeping should be

incorporated in the roads in the future.

The deployment of waste bins for pedestrians along the roads is part of a program to provide

the city with urban furniture which should contribute to keep clean the roads and public areas.

This deployment should be continued with taking into consideration DIMAUD’s technical

input to improve the street sweeping performance.


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11. Transfer

DIMAUD should implement the Transfer and Transport Project. The pre-feasibility study

should be taken as a base for this purpose. As a priority and due to the urbanization process,

the Municipality should consider the acquisition of land which will be necessary for a transfer

station.

12. Final Disposal

The M/P has given a significant importance to the final disposal.

The plan to give in concession to the private sector the sanitary landfill operation should be

proceeded by taking as a base the M/P feasibility study.

However, some limitations have been detected during the concession process. Among these

limitations, there are land ownership issues, San Miguelito Municipality solid waste

discharge, and extraction of materials in the operation areas. In order to have a high

participation of bidders, it is convenient that those limitations have been overcome at the

beginning of the bidding process.

13. Commercialization

The clients database should be completed and updated with the tools provided by General

Controller Office (the District database and digitalized map).

The identification of ICI´s clients should be prioritized in order to initiate the Special

Collection Service for ICI´s.

The 800ASEO system should be expanded and strengthened. This system will be of great

value to support a telephone marketing program which is directed to the new service for ICI´s

clients. In the M/P, a scheme is presented which will serve to develop this telephone

marketing program to support the activities by the Commercialization Department.

14. Finances

A cash flow projected until 2015 is presented in the M/P. DIMAUD should continue working

with these figures and should adjust them to the variations which might occur in the financial

sector. Fund requirements should be foreseen well in advance.

The new Management Unit should provide information about the performance of the entity.

Management indicators should be used to monitor the performance levels. The efficiency

levels projected can be attained if any deviation from them is corrected on time as they occur.


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15. Human Resources

The adjustment of the administrative structure which was approved requires an extensive

training program. The need to provide training has been detailed in the description of every

administrative unit. A continuous training program is essential to achieve an improvement in

the performance of the human resources in the whole entity.

The worker should be protected from labor accidents and professional diseases. Coordination

with Caja del Seguro Social (Social Security Institution) is essential in occupational health,

and medical and emotional attention.

The self-esteem of workers should be developed through a well structured program. A day

dedicated to the cleansing workers should be established as an important sign of appreciation

from the city to the workers.

16. Organizational Environment

The approval of the Cleansing Regulation (Municipal Ordinance), the definition of objectives

for the entity, the adjustment of the organizational structure, and the implementation of the

Master Plan requires an extensive and detailed explanation to all members of the working

community in DIMAUD.

It is necessary to generate a team work spirit in order to increment the synergy and improve

the performance. Similarly, a policy to recognize the work done and to provide incentives and

rewards for the workers should improve the organizational environment.

Last Words

We thank the municipality and DIMAUD authorities, as well as the technical and operative

personnel who work in those entities because they have helped us to conduct and finalize

successfully, in a joint effort, this Study.

We acknowledge the Panamanian C/P for their permanent support and interest in this

endeavor.

The learning experiences acquired in this new way to conduct and develop the technical

assistance will be of great value for us in future undertakings.


The Study on Solid Waste Management Plan for

Municipality of Panama in the Republic of Panama

List of Volumes

Volume I Summary

Volume I (S) Summary (Spanish Version)

Volume II Main Report

Volume II (S) Main Report (Spanish Version)

Volume III Annex

Volume III (S) Annex (Spanish Version)

Volume IV Data Book

Volume IV (S) Data Book (Spanish Version)

This is the Summary.

In this report, the project cost is estimated by using the May 2002 price and an exchange rate

of U$1.00=B/1.00(Balboa)=JP¥125.00.

Location Map of the Study Area

（Source: Microsoft Encarta Interactive World Atlas）

The Republic of Panama

Study Area Panama District

Documents

THE STUDY ON SOLID WASTE MANAGEMENT PLAN FOR … · JICA selected and dispatched a study team headed by Mr. Hiroshi Kato, KOKUSAI KOGYO CO., LTD. to Panama three times between December